With Europe on the brink of recession and the US economy in stagnation, it isn’t just India, but China, Turkey and Brazil too whose small businesses are eyeing the cost-saving potential of Africa. In this competitive climate (an Indian entrepreneur running a mid-size firm that supplies equipment to Africa says the competition for business is so intense that getting an appointment with bureaucrats who approve projects is becoming increasingly difficult), it’s critical to recognise what market segment a firm wants to focus on in a new country.
“There is a market for every price band of products, that is why cheap Chinese stuff sells on the streets of Karikoo in Tanzania or other local markets,” says Renu Modi, an Africa studies research fellow at Gateway House, a foreign policy think-tank based in Bombay. She says African consumers are very price-sensitive, just like Indians, but Indian manufacturers tend to have the USP of “Triple A technology”—that is, appropriate, adaptable and affordable. “The markets in Africa are surely competitive, but India can have niche areas—pharmaceuticals, food processing, SMES etc,” says Modi.